Cabinet clears ₹1.86 lakh crore plan to move green power

What is a green energy corridor?

A green energy corridor is a network of high-voltage transmission lines and substations built specifically to carry renewable power. Solar and wind farms are often in remote, sunny or windy areas, far from cities. The grid was built for coal plants, so these dedicated "roads" move clean electricity hundreds of kilometers to where people use it, reducing wasted energy and keeping the grid stable.

How does battery storage help the grid?

Battery storage steadies the grid by storing extra solar and wind power and releasing it when demand peaks, like evenings. It addresses intermittency, congestion, and peak-hour curtailment, ensuring renewable power meets non-solar hour demand and keeps the grid stable round-the-clock.

Who pays for the new power lines?

The Centre is putting in ₹54,082 crore of central financial assistance to offset intra-state transmission charges, which keeps power costs down for consumers. The remaining outlay is funded through the states and private transmission companies that bid for projects under the tariff-based competitive bidding route. The bids determine the transmission tariff, which is ultimately recovered from electricity users through their power bills. Our read: the government's assistance cushions the bill impact, but consumers still bear the underlying cost of the corridor through tariffs over the project's life.

What happens if the new lines are delayed?

The first phase of the Green Energy Corridor saw delays from right-of-way issues, forest clearances and approvals related to the Great Indian Bustard. In the second phase, states sought extensions due to non-participation in tendering and regulatory issues. Under the new plan, a Cabinet Secretary-level committee will review progress every six months to catch such problems early. Our read: on past form, the 2032-33 target will slip, and the Centre's half-yearly reviews are the main tool to stop it slipping far.

Why can't the new lines be slowed without hurting the power grid?

The new lines are not optional capacity: renewable generation is already far ahead of the grid's ability to carry it. As of August 2026, India had installed 168 GW of solar alone, and the corridor's 135 GW target assumes that capacity keeps growing to meet a 900 GW non-fossil goal by 2035. Without the dedicated lines, grid operators are forced to curtail, or deliberately shut down, renewable output to stay stable, and Karnataka alone curtailed 1,200 GWh in 2024. Delays would widen the gap between generating capacity and what can actually be delivered, wasting both clean power and the money spent building it.

What does the new battery storage actually do for the grid?

The 50 GWh of battery storage in the third phase is meant to fix the intermittency problem at its source. It stores excess solar and wind power during peak generation hours and releases it in non-solar hours, addressing congestion, peak-hour curtailment, and keeping the grid stable round-the-clock. At 50 GWh, this is roughly triple the 13.8 GWh already supported by existing viability gap funding schemes and is planned to complement the 47 GW of storage the National Electricity Plan projects by 2031-32. Our read: the storage is the critical piece that makes the transmission lines actually useful by shifting renewable power to when it is needed.

Why can't the battery storage be built faster?

Battery storage is expensive and its costs are not fully settled. India imported 85% of its cells in 2024, adding 18-22% to landed costs through customs duty, GST, and freight; first-generation Indian plants will run at 60-70% of Chinese cost efficiency until they reach 10 GWh output. State rules are also patchy, with some classifying BESS as generation and others as transmission, which deters equity investors. Our read: the 50 GWh target will be met mainly by big developers like Adani, who are already scaling up, not by new entrants.

Why is the storage tied to the transmission lines instead of being a separate project?

The 50 GWh of battery storage is built into GEC-III because storage only earns a return if it can charge from and discharge into the network the lines create. The scheme puts storage at renewable generator sites or other grid-flexibility points, so it can absorb surplus solar during peak hours and release it in non-solar hours, which is exactly when the new corridors would otherwise sit under-used. A separate storage effort would not solve the corridor's core problem of shifting power to when demand is high. India already runs two VGF storage schemes covering 43.8 GWh, and the plan is to be roughly triple that, showing the government treats storage and transmission as one integrated investment.

Why can't existing power lines carry solar power?

Existing lines were built for steady coal power, not for solar's variable output, so they can't absorb or transmit it without risking grid instability. Operators may then curtail renewable output. New corridors provide dedicated transmission capacity for that power.

Why are only some states in the plan?

The Green Energy Corridor targets renewable-rich states where solar and wind farms are located. The first two phases covered ten states including Rajasthan, Gujarat, Karnataka and Tamil Nadu, with Kerala and Uttar Pradesh added in the second phase. The third phase focuses on intra-state transmission in these states and Union Territories, with Mizoram and Bihar currently being evaluated for inclusion. States with weaker renewable resources or weaker discom balance sheets, like Uttar Pradesh, Bihar and West Bengal, trail in battery storage deployment and lack clear cost-recovery mechanisms.

Why does competitive bidding matter?

Competitive bidding keeps costs down by making companies bid against each other to build transmission lines at the lowest price. Under GEC-III, all greenfield projects use this method, aiming to protect consumer interests and ensure cost-effective development of the grid.

Are the previous phases of this project done?

No, they are not. The first two phases were meant to move 44 gigawatts of renewable power, but as of January 2026, which is before the article's date of September 30, 2026, only about 26 gigawatts had been connected. One Phase-I project is still pending and expected to finish by the end of fiscal year 2027. Phase-II also has unfinished work, which the new monitoring committee will now oversee.

Is 135 GW a lot for one project?

Yes, 135 GW is a very large amount. For scale: India's entire renewable installed capacity was about 274 GW in March 2026. Phase-III alone seeks to evacuate energy equal to half of that; it also dwarfs the 44 GW planned under Phases I and II combined.

What happens when the grid can't take all the solar and wind power?

Grid operators limit renewable output to protect the network, a practice called curtailment. Karnataka alone curtailed 1,200 GWh of renewable power in 2024, forcing developers like JSW Energy to install batteries that shift midday solar into evening hours. The 50 GWh storage component is designed to soak up this surplus and release it during non-solar hours, addressing congestion and peak-hour curtailment. Without it, the ₹1.86 lakh crore transmission investment would still leave renewable plants idle.

Why can't the grid just store the power closer to the solar farms?

The 50 GWh battery storage in this plan is meant to be placed at the renewable generator end or other key grid points, not right at the solar farms. Storing power at the source would not solve the core problem: the transmission lines themselves are congested. Power still needs to travel from where it is generated to where people live, and the grid needs to carry it. The batteries relieve peak-hour congestion by shifting midday solar into evening demand, but they cannot replace the physical lines needed to move the power. Transmission investment and storage are complementary, not substitutes.

Why is the storage being placed so far from the farms?

The 50 GWh of battery storage is to be placed at the renewable energy generator end or any other key location for grid flexibility, not necessarily next to the farms. Placing it at the source would not fix the core issue: the transmission lines themselves are congested. The batteries are designed to shift midday solar into evening peak hours, which eases congestion on the lines and reduces curtailment. But they cannot move power to where people live. That still requires the physical transmission lines, so the two investments work together, not as replacements for each other.

Who actually builds and runs these transmission lines?

State transmission utilities are the overall implementing agency, but greenfield lines go through tariff-based competitive bidding where private transmission service providers build, own, operate and maintain them on a build-own-operate-maintain model. Brownfield upgrades use the older cost-plus model. The winners quote the lowest levelized tariff for 35 years. This split matters because private bidders bear construction risk, so delays over right-of-way or forest clearances hit them first, before costs flow back to consumers through tariffs.

Why does India keep importing batteries if it can make them?

India imported 85% of its battery cells in 2024, and domestic plants are the reason. First-generation Indian cell plants are likely to run at only 60-70% of Chinese cost efficiency until they reach 10 GWh output, so near-term reliance stays high. The basic customs duty on cells is 10% plus 18% GST, and freight from China nearly doubled after Red Sea diversions. To ease this, the government has exempted capital goods for lithium-ion cell manufacturing from basic customs duty until March 2028. Our read: that exemption is the bet that local plants get cost-competitive before the support ends.

Why is the tariff-based bidding model better for new lines?

Greenfield lines under GEC-III go through tariff-based competitive bidding, where the lowest bidder wins a 35-year contract to build, own, operate and maintain the line. This shifts construction and cost risk onto the private bidder, unlike the older cost-plus model where the builder recovers actual costs plus a return, letting cost overruns flow to consumers. Competitive bidding also keeps tariffs down by forcing efficiency at the bid stage, protecting consumers from inflated project costs over the line's lifetime.

Who pays for this, and who saves?

The government pays the largest share, with central financial assistance of ₹54,082 crore, while states and private transmission companies fund the rest. Consumers save, because the subsidy offsets intra-state transmission charges and keeps power costs down.

Who ends up footing the bill for unbuilt lines?

The plan's central financial assistance of ₹54,082 crore offsets intra-state transmission charges, which keeps consumer power costs down. But the money only flows after projects are built. If transmission lines get delayed, as they did in Phases I and II over right-of-way and forest clearances, the renewable plants still get curtailed and developers lose revenue. Consumers then pay more for power from other sources, and the benefits of cheap solar and wind stay unrealized. The risk of delay is borne first by developers, then by consumers through higher bills.

Why does India still import most of its batteries?

India imported 85% of its battery cells in 2024, adding 18-22% to landed costs through customs duty, GST, freight and working capital. The basic customs duty on cells is 10% plus 18% GST, and freight from China nearly doubled after Red Sea diversions. First-generation Indian cell plants are likely to run at only 60-70% of Chinese cost efficiency until they reach 10 GWh output, so near-term reliance stays high. To ease this, the government has exempted capital goods for lithium-ion cell manufacturing from basic customs duty until March 2028.

Why add battery storage to a transmission plan?

Solar and wind only generate when the sun shines or the wind blows. Batteries store that power and release it during evening peaks, so grid operators don't have to cut output when supply exceeds demand. The plan sets aside ₹50,000 crore for 50 GWh of storage, enough to shift midday solar into non-solar hours.